Early in Moby Dick, Ishmael
is warned about his new skipper: "He's a queer man, Captain Ahab . . . Ahab's
been in colleges, as well as 'mong the cannibals."

Last week's news
of parents bribing officials to get their average kids into above-average
universities reminded me how queerly Melville connected colleges and cannibals.
Those kids are certainly among the cannibals now.

But
enough of him. Today's more visible problem is the Hunger
Games world we created where college-bound high school kids
are among the cannibals -- each
other!

Operation
Varsity Blues threw light on a shady business that allowed parents to bribe
coaches to recruit their kids as college-level athletes even if they never
played, to pay proctors to correct their imperfect SAT answers, and (even
easier) to hire smarter kids to take the SAT for them. https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.
This conduct had the effect, according to the US Attorney, of "robbing students
all over the country of their right to a fair shot" to get into an "elite"
college.

Maybe,
but it is an odd right to be robbed of. Of course there
should be a level playing field for all college applicants,
but there never has been. Rich kids have always tipped the table merely by
being rich. Forget legacy and athletic admissions, which are minor in
comparison. Wealthy parents rig the game from the start, with top-notch
prenatal and pediatric care, followed by Montessori preschools, homes in
high-end public school districts, private schools, personal tutors, SAT coaches
and all the other "enrichment" programs that not-rich people can't afford. All
those educational supplements are bricks in the wall that protects the haves
from the have-nots. See https://www.theatlantic.com/magazine/archive/2018/06/the-birth-of-a-new-american-aristocracy/559130/. Is it any wonder that, when that all fails, some desperate parents would resort
to fraud?

But for
all that, do kids really benefit from their struggles to get into one top
college over another? The criminal complaint talks about 28 students. I assume
there were more. It seems, then, that a few dozen privileged applicants
unfairly edged out an equal number of other privileged applicants for spots at
a few prestigious colleges. Those who were "robbed" were then forced to attend
a different college, but likely just as prestigious. I just can't muster much
sympathy for whoever had the hard luck of having to go to Berkeley for being
"robbed" of a shot at Stanford. This is not to condone the scam, but because I
think there's a much bigger one behind it -- the long con that, at least as
among the country's top hundred or so colleges, one is any "better" or "worse"
than another.

I've
now lived long enough to doubt it matters much where one goes to college, and
not just because of billionaire dropouts. Research shows that, except for
disadvantaged minorities, attendance at an "elite" college has little if any
effect on income in later years. https://www.nber.org/papers/w7322.pdf.
After some experience in the world, we've all encountered successful,
intelligent and happy persons who've gone to every rank of college as well as
none at all. In most cases, what one had before going to college, what one
brings to college -- intelligence, diligence, and moral compass -- matter more
than what one takes from it.

Now, I don't blame qualified high schoolers for wanting to go to the
"best" college they can get into. I just don't think that ranking colleges one
"better" than another is a useful exercise. Perhaps there is a top tier, but a
meaningful top tier will be surprisingly wide.

According to the
College Board, an SAT score of 1010 or better means you are 75% likely to earn
at least a "C" in college. About half of the population will score a 1010 or
better, and most would pass. The real world doesn't need more than a passing
grade, because (as we all know) most things that real people do are not
critical to life, liberty or anything that really matters.

But the range of
accepted scores of the national university that ranks 100th place in the
US News & World Report survey bottoms out not at
1010, but at 1230. That is also the bottom-range score of the country's 61st
place liberal arts college. Those top 161 colleges and universities admit about
450,000 applicants annually. That's a lot of
freshmen.

Yet a
1230 SAT puts one in the top 15% of the country. The 1230 SAT score that
scrapes the bottom of the barrel of the 100-ranked university still marks you
as being a foot smarter than just about everyone else. Isn't that "elite"
enough?

But
there's more. What difference is there between someone in the 15th percentile
and someone in 1st percentile? I'm not talking about scholars and academics.
I'm talking for those of us who live and work outside the ivory towers on real
world problems. I've met many smarter than me, and here's what I think. Someone
with a higher IQ (or SAT, which still is 80% correlated to IQ) will solve some
problem faster that I will. But I too will solve that problem eventually, and I
may end up understanding it better for having put more time and effort into the
solving. For most real world applications, the extra speed that a higher IQ
gives you doesn't count for all that much. Being able to explain a solution to
someone else (which is the only way to be sure you understand it) counts for a lot
more. That takes work, and work trumps brilliance. See https://som.yale.edu/news/2009/11/why-high-iq-doesnt-mean-youre-smart.
In other words, those extra 300 SAT points that separate the top ranked from
the 100th ranked college give one little more than bragging rights. That we
still use them to discriminate between applicants is insidious. I'm glad some
colleges are starting to make them
optional.

By the
way, I'm not a disgruntled outsider. I'm a disgruntled insider. I'm a Harvard
graduate, and for over a decade, I have interviewed prospective applicants for
admission. Each year, I see high school kids competing for "the best" colleges,
with all the stress and anxiety that goes with the effort. They are all bright,
and all qualified; about 85% of Harvard applicants can do the work. But their
high school careers are impossibly overscheduled with AP courses and
extracurricular achievements, each student trying to outdo his classmates to
impress some faceless college admissions committee. They do it to please their
insecure parents and striving teachers, and because they've been brainwashed
into thinking the prize of attending a college ranked a spot higher by
US News & World Report is worth the abuse they
endure. That's the fraud that dwarfs Varsity
Blues.

But every
so often, I meet a young person insightful enough to call bullshit. They live
comfortably in their own skins, they do their own thing at their own pace, they
march to the beat of their own drum. I know they will be happy wherever they
matriculate. They seldom have perfect SATs, or valedictory grades, or armfuls
of faux achievements, but I always root for them. They are too few. I hope the
Varsity Blues inspire more bright kids stand up and denounce the whole college
rank/college prep complex for the scam it is. They deserve better than to be
just more bricks in the
wall.

Aegis Frumento is a partner of Stern Tannenbaum
& Bell, and co-heads the firm's Financial Markets Practice. Mr.
Frumento represents persons and businesses in all aspects of commercial,
corporate and securities matters and dispute resolution (including trials and
arbitrations); SEC and FINRA regulated firms and persons on regulatory
compliance issues and in SEC and FINRA enforcement investigations and
proceedings; and senior executives of public corporations personal securities
law and corporate governance matters. Mr. Frumento also
represents clients in forming and registering broker-dealers and registered
investment advisers, in developing compliance policies, procedures and
controls, and in adopting proper disclosure documents. Those now include
industry professionals looking to adapt blockchain technologies to finance and
financial market enterprises.

Prior to joining the firm, Mr.
Frumento was a managing director of Citigroup and Morgan Stanley, a partner and
the head of the financial markets group of Duane Morris LLP, and the managing
partner of Singer Frumento LLP.

He graduated from Harvard College in
1976 and New York University School of Law in 1979. Mr. Frumento is a frequent
author and speaker on securities law issues, and is often quoted in the media
on current securities law developments.

NOTE:
The views expressed in this Guest Blog are those of the author and do not
necessarily reflect those of BrokeAndBroker.com Blog.

BILL SINGER is a lawyer who represents securities-industry firms, individual registered persons, Wall Street whistleblowers, and defrauded public investors. For over three decades, Singer has represented clients before the American Stock Exchange, the New York Stock Exchange, the Financial Industry Regulatory Authority (formerly the NASD), the United States Securities and Exchange Commission, and in criminal investigations brought by various federal, state, and local prosecutors. He has the distinction of representing witnesses during Congressional investigations. In 2015, Singer achieved a significant award in excess of $1 million from the Securities and Exchange Commission on behalf of a whistleblower client.

Singer is presently Of Counsel to a law firm and the publisher of the Securities Industry Commentator feed and the BrokeAndBroker.com Blog, which was rated as one of the industry's top eight destination websites and the leading legal/regulatory blog by "Investment News."

Before entering the private practice of law, Singer was employed in the Legal Department of Smith Barney, Harris Upham & Co.; as a regulatory attorney with both the American Stock Exchange and the NASD (now FINRA); and as a Legal Counsel to Integrated Resources Asset Management. Singer was formerly Chief Counsel to the Financial Industry Association; General Counsel to the NASD Dissidents' Grassroots Movement; and General Counsel to the Independent Broker-Dealer Association. He was registered for a number of years as a Series 7 and Series 63 stockbroker.

Singer regularly appears as a commentator on television and radio, and is frequently quoted in the press. He is an outspoken critic of ineffective regulation and an advocate for economic and political sanity.